The retail sector isn’t the only holiday shopping play. Semiconductors could also benefit from a potential spike in demand for electronics.
The semiconductor shortage has certainly affected the electric vehicle industry, as demand far exceeds the supply for chips. That same demand could translate to consumer electronics as holiday shoppers scramble for gifts.
“With a seemingly endless global shortage of chips, semiconductor stocks are a great way to pad your portfolio with companies that have the ‘problem’ of a bottomless demand for their products,” Investorplace notes. “A demand that is reaching a fevered pitch as the holiday season approaches.”
This paves the way for an opportunity to play the Direxion Daily Semiconductor Bull 3X ETF (SOXL). Its holdings include ON Semiconductor, which produces chips for a wide range of applications, as do other companies in SOXL.
“Their products are found in a wide range of commercial and consumer tech, meaning demand is becoming even more intense as the holiday shopping season gets underway,” Investorplace adds.
SOXL seeks daily investment results equal to 300% of the daily performance of the PHLX Semiconductor Sector Index. The index measures the performance of domestic companies engaged in the design, distribution, manufacture, and sale of semiconductors.
A Broad Tech Play
Another way to play the holiday shopping season could be to capitalize on tech directly. This could be done with funds like the Direxion Daily Technology Bull 3X ETF (TECL).
With names like Apple as part of TECL’s holdings, traders can get exposure to companies offering the latest and greatest in consumer electronics. TECL seeks daily investment results, before fees and expenses, of 300% of the daily performance of the Technology Select Sector Index.
The fund, which is up over 100% this year, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments, such as swap agreements and securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index includes domestic companies from the technology sector.
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